It seems that not a month goes by without the Employment Tribunal hearing a case which has a substantial impact on the complex issue of employee entitlement to annual leave and pay.
The rules are slowly becoming clearer, with judgments addressing the inclusion of overtime in holiday pay calculations and the right of employees to accrue annual leave during periods of absence for maternity or sickness. It is this last point which forms the basis of this article, and the impact of the recent case of Plumb v Duncan Print Group Limited.
Mr Plumb was employed as a printer by Duncan Print Group Limited. He suffered an injury at work in April 2010 and remained on sick leave from this date until his employment was eventually terminated in February 2014. Mr Plumb made no request to take annual leave between 2010 and 2012. He did make a request for leave in respect of 2013, which was granted was his employer. Upon termination of his employment, Mr Plumb sought payment in lieu of the annual leave which he had accrued for the years 2010, 2011 and 2012. This request was denied by his employer.
The Employment Tribunal dismissed Mr Plumb’s claim on the grounds that he could not demonstrate that he was unable, by reason of his medical condition, to utilise his leave during the period from 2010 until 2012. The ET also suggested that leave ought to carry over for a maximum of 18 months from the end of the leave year in which it was accrued.
This decision was overturned in part upon appeal.The EAT held that an employee, in order to carry leave over from one year to the next, need not be able to show that he was unable to take his annual leave as a result of his sickness. An employee may choose to take annual leave during sickness absence, but is not compelled to do so. Therefore, an employee such as Mr Plumb would be entitled to carry leave over and use it at a later date.
The EAT recognised that this rule cannot exist without limitations, and upheld the ET’s contention that leave carried over must be utilised within 18 months. For Mr Plumb, this meant that he could successfully claim for pay in lieu of the leave accrued from 2012 until 2013, but not for the earlier years.
This case highlights how important it is for employers to know and understand their employees’ annual leave and pay entitlement. This is an issue which will continue to appear before tribunals time and time again in future: employers must be sure to comply with the statutory rules to avoid potentially costly litigation.